India To Meet Divestment Target First Time After ONGC-HPCL Deal
The government is all set to cross its annual disinvestment target for the first time with the Oil and Natural Gas Corporation Ltd. buying its entire 51 percent stake in refiner and marketer Hindustan Petroleum Corporation Ltd. for Rs 36,915 crore.
Total disinvestment proceeds during the ongoing financial year 2017-18 stood at Rs 54,338 crore as on Jan 11. With its stake sale in HPCL, the government's disinvestment receipts will go up to a record Rs 91,253 crore.
The selloff will help the government stick to its fiscal deficit target of 3.2 per cent of the GDP this financial year when it may see lower collections from the newly introduced Goods and Services Tax.
In the Union Budget presented on Feb. 1 last year, Finance Minister Arun Jaitley had set the target of disinvestment in public sector units at Rs 72,500 crore. This includes Rs 46,500 crore as disinvestment of central public sector enterprises, Rs 15,000 crore from strategic sales and Rs 11,000 crore from listing of insurance companies.
The government reduced its stake in several state-run companies this year, including Hudco, Engineers India Ltd., NTPC Ltd., National Aluminium Company Ltd. and Oil India Ltd. Two state-owned insurance companies General Insurance Corporation Ltd. and New India Assurance Ltd. were listed on stock exchanges.
In the previous financial year, the government had raised Rs 46,247 crore after it scaled down the target from Rs 56,500 crore estimated in the budget to Rs 45,000 crore.
State-owned ONGC today announced acquisition of the government's entire 51.11 percent stake in refiner HPCL for Rs 36,915 crore, paying a premium of over 13 per cent.
Earlier in the month, the government had announced to curtail its additional market borrowing programme by 60 percent to Rs 20,000 crore. The decision to lower additional borrowing, which was taken after a review of revenue receipts and expenditure, will help contain fiscal deficit that has come under stress because of a lower GST mop-up.